market folly

Jim Simons, founder of quantitative investment firm Renaissance Technologies (commonly referred to as Rentec) this year made a rare appearance at one of the TED talks.  The conversation was entitled "A rare interview with the mathematician who cracked Wall Street."

As we've highlighted in the past, Rentec's internal Medallion Fund has generated outstanding performance numbers.  While many hedge funds charge 2% management and 20% performance fees, Medallion was said to charge 5% and 44% at one time.  While this fund is only available internally, Rentec also runs two other funds available to outside investors, known as RIFF and RIEF.

His talk touches on topics of mathematics, code breaking, and patterns in the world of finance.

He attributes his success to assembling a great team.  Rentec famously employs scientists, mathematicians, astronomers, and physicists.  Their approach focuses on assembling a lot of data and looking at patterns.

Simons said that, "We take in terabytes of data a day and store it away and massage it and get it ready for analysis and you're looking for anomalies."

He also noted that hedge funds as a whole have not fared that well over the last 3-4 years.

Embedded below is the video of Jim Simons' TED talk:



For more from this legend, we've also previously posted Jim Simons on mathematics, common sense, good luck & his career.